11. The Inground Sprinkler Supply sells sprinkler systems suited for large or small yards. The company has decided to adopt an activity-based costing system. Last year the company incurred $1,000,000 in overhead costs related to the following activities:

Activity Purchasing Material handling Quality inspection

Allocation Base

number of purchase orders number of shipments received number of inspections

Overhead Cost

$ 350,000 200,000 450,000 

The activities for large and small yard systems were as follows:

purchase orders shipments received inspections

Large Small

15,000 20,000 7,500 12,500 11,500 11,000 

If a customer requested a bid on a specially designed sprinkler that would probably require four inspections, how much quality inspection overhead would you include in the bid?